Former Prime Minister Manmohan Singh slammed the demonetisation of Rs.500 and Rs.1,000 notes as “monumental mismanagement“ that might dent GDP by 2%, prompting finance minister Arun Jaitley to hit back, saying that the maximum black money was generated during Singh's tenure as PM.
Singh made an unusual intervention in the Rajya Sabha, saying the deaths of people and distress among the poor, farmers and small traders had convinced him that demonetisation had led to “organised loot and legalised plunder“. “Every day the banking system comes up with new rules. It reflects very poorly on the PMO, the finance minister's office and RBI.“ The sharp attack saw Jaitley, who has usually avoided joining issue with Singh, reminding him of scams under the UPA.
“Those who did not consider the generation of so much black money and scams during their regime as a blunder are now finding the crusade against black money a blunder,“ he said and rejected the claim that GDP growth would drop by 2% and accused the opposition of avoiding a debate.
In the Rajya Sabha, Jaitley and Prime Minister Narendra Modi heard Singh's seven-minute intervention in which he urged the government to find practical ways to give relief to a majority of people who are suffering and pointed out that 60 to 65 people had already lost their lives due to the move.
Reminding the government that 90% of the workforce was in the informal sector and 55% of those in agriculture were in distress, Singh said, “These measures convince me that the way the scheme has been implemented, it is a monumental management failure and, in fact, it is a case of organised loot and legalised plunder of the common people.“
Singh, who has also been finance minister and RBI governor, said, “The national income, that is the GDP of the country, can decline by about two percentage points as a result of what has been done. This is an underestimate, not an overestimate.“
Noting that demonetisation could weaken and erode people's confidence in the currency and banking system, Singh quoted John Maynard Keynes to counter Modi's appeal to the people to bear with him for 50 days. “Those who say demonetisation is good in the long run should recall the quote: `In the long run we are all dead'.“